intel logoEven with the settlement of Advanced Micro Devices’ antitrust lawsuit, Intel still faces scrutiny for alleged anticompetitive behavior. A new report suggests that the Federal Trade Commission has widened its investigation to include Intel’s actions related to graphics chip maker Nvidia.

Sources told the San Jose Mercury News that the FTC is investigating whether Intel has acted anticompetitively in dealings with Nvidia. Also, AMD executive Tom McCoy told Business Week that the FTC case was expanding beyond Intel-AMD matters. That’s despite the fact that Intel agreed to pay AMD $1.25 billion to settle private antitrust litigation. Hector Marinez, an Nvidia spokesman, confirmed this morning that his company has spoken to the FTC but could not say more. Intel has steadfastly said that it has cooperated with all government investigations.

This turn of events is predictable, given the public spats between Intel and Nvidia, which are engaged in their own lawsuit. But it’s hard to tell what will happen in the government antitrust probe, as the FTC has been investigating Intel for a long time. This morning, Intel also confirmed, as it has in the past, that it is in ongoing discussions with the FTC. An FTC spokesman confirmed the federal agency is investigating Intel but would not say more.

Intel and Nvidia are natural partners, with Intel providing microprocessors and Nvidia providing graphics chips inside a PC. But they’ve been quarreling over chip sets, which are like traffic cops inside the computer, routing data within the PC and communicating with external devices. Intel changed its technology for connecting microprocessors and chip sets, raising the question about whether Nvidia still had the right to make chip sets. Intel’s interpretation is no; Nvidia’s is yes.

On top of that, Nvidia chief executive Jen-Hsun Huang has publicly harangued Intel for bundling its Atom microprocessors with chip sets (and on another occasion here) in a way that makes it unaffordable for PC makers to carry Nvidia’s Ion chip sets. Some of the debate is natural tension between competitors. But Nvidia has charged that Intel priced its Atom-chipset bundles so low that they’re cheaper than Atom stand-alone chips, effectively locking Ion out of the market. Intel has denied those charges. Nvidia has sold its Ion chip sets, but perhaps not at the rate that the company expected.

The European Union fined Intel $1.45 billion in May. That was a big sign that AMD had a strong case against the company, and it probably motivated Intel to settle the AMD lawsuit. But that settlement doesn’t stop government agencies from pursuing their own cases. Based in part on evidence revealed by the EU, the New York Attorney General’s Office recently filed an antitrust suit against Intel.